IIA Certified Government Auditing Professional IIA-CFSA Questions & Answers

• Question 31:

  Customer accounts:

  Ensure that the firm is exercising due diligence in the opening and supervision of customer accounts. The procedures should be formalized in writing and in accordance with the rules and regulations of the appropriate regulatory authority.

  Ensure that daily customer positions and option exercises are in accordance with the limits established by the appropriate exchange. Verify that commissions generated by customer trades are properly calculated and posted to the general ledger.

  A. This is one of the primary audit objectives of stock and options

  B. This is one of the primary audit objectives of swaps

  C. This is one of the primary audit objectives of bonds

  D. None of these

  Correct Answer: A

• Question 32:

  The main objective/s of an audit of swaps is/are:

  A. To determine the adequacy and effectiveness of controls relating to rate swap transactions

  B. To ascertain that swap transaction are properly recorded in accordance with their term

  C. To ensure that the company's financial statements and regulatory reports properly reflect in accordance with generally accepted accounting principles, the results of swap activity

  D. All of these

  Correct Answer: D

• Question 33:

  Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

  A. A daily reconciliation of traders' positions should be performed

  B. To minimize market risk in hedge transactions:There should be independent sign-off procedures for hedging modelsAll hedge strategies should be clearly definedAll software and products should be secure and temper resistant

  C. All transactions should be authorized and affirmed

  D. All of these

  Correct Answer: D

• Question 34:

  General Market indices in the commodities market with which many people would be familiar include:

  A. Goldman Sachs Commodities Index (GSCI)

  B. Commodities Research board

  C. Acme Tool and Die

  D. Both AandB

  Correct Answer: D

• Question 35:

  ____________ swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets.

  A. Fixed-floating swaps

  B. Currency swaps

  C. Interest rate swaps

  D. None of these

  Correct Answer: B

• Question 36:

  Standard and poor's 500 index, the Dow Jones Industrial average, or the Toronto stock Exchange index is the examples of:

  A. Equity indices

  B. Stock exchange indices

  C. OTC market indices

  D. All of these

  Correct Answer: A

• Question 37:

  One of the largest components of the global derivative markets and natural adjunct to the fixed income markets is the:

  A. Volatility

  B. Interests rate Swaps

  C. Commodity Swaps

  D. Both B and C

  Correct Answer: B

• Question 38:

  A gold producer wants to hedge his loses attributable to a fall in the price of gold for his current gold currency. This is an example of:

  A. Currency Swaps

  B. Commodity Swaps

  C. Interests rate Swaps

  D. All of these

  Correct Answer: B

• Question 39:

  An entity that purchases and sells securities on its own behalf is acting as:

  A. A broker

  B. A dealer

  C. An agent

  D. A principal

  Correct Answer: B

• Question 40:

  Which of the following statements about the over-the-counter market is false?

  A. Mutual funds and other new issues are initially issued over the counter

  B. Security prices are determined through auction bidding

  C. Broker dealers must be resigned

  D. Securities are traded at many locations throughout the country

  Correct Answer: B